deVere Group CEO gives warning to British business despite Boris Bounce

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Today, CEO of one of the worlds largest independent financial advisory organizations in deVere Group has given a warning to British business, despite the Boris Bounce and Brexit.

The FTSE 100 saw a very strong start to the week of trading yesterday, as all firms bar four saw their shares boosted across Monday trading.

Dubbed the ‘Boris Bounce” many firms saw their shares rally after the landslide Conservative win on Friday.

Notable winners included the British Banking business sectors where Lloyds shares have jumped 6.4% to 65p on the election results.

Additionally, Barclays PLC shares rallied 7.77% to 185p on Friday, whilst Royal Bank of Scotland Group plc saw their shares spike 10.69% to 257p.

Another noteworthy winner was the homebuilding sector, where many businesses saw shares in green.

Taylor Wimpey saw their shares rally 14.88% to 200p, who happened to the biggest rise on Friday.

Berkeley Group Holdings PLC (LON: BKG) shares spiked 13.06% to 5,102p despite the timid update provided a few days ago.

However, it seems that the optimism from Friday’s election results is beginning to fade as markets restore normality and businesses continue to see their shares up and down.

Nigel Green, chief executive and founder of deVere group said that PM Johnson could spook financial markets in 2020.

Green added that investors must avoid complacency in what still seem to be uncertain times for British business.

Nigel Green affirms: “The decisive win for the Conservatives triggered one of the pound’s biggest ever rallies, the FTSE 250 index of UK shares climbed by 3.6 per cent and the FTSE 100 rose 1.3 per cent. “On Monday, European stock markets reached all-time highs. “This has been driven in part by investors’ relief that a hung parliament had not been delivered, meaning years of uncertainty and indecisions over the UK’s way out of the EU is coming to an end. Also, perhaps, because the Conservatives promised a more pro-business agenda.” He continues: “But Boris Johnson now has the daunting task of turning his powerful election campaign slogan of ‘Get Brexit Done’ into reality. “When Britain leaves on January 31, there will be only 11 months to thrash out the basics of the future relationship with the European Union. “The self-imposed end of December 2020 deadline is a mammoth challenge or Britain will fall through the ‘trap door’ of no-deal Brexit on January 1 2021.” The Prime Minister could request another extension for the transition period. The government has until 1 July 2020 to agree with the EU a one-off extension, until the end of 2021 or 2022. But, says Mr Green, this is unlikely. He notes: “I don’t believe that Johnson will use his significant majority to slow down or soften – the Brexit process. “Instead, his assumption from the election outcome will be that people want quick, easy answers. “Indeed, in an interview on Sunday, Michael Gove guaranteed that the Brexit transition period will not be extended.” He goes on to add: “The task ahead is monumental. The time frame in which to complete it is narrow. Failure to agree a free trade deal by the end of next year will mean the UK crashing out of the EU and all the far-reaching negative economic implications, including the likelihood of a recession. “With such uncertainty, following the election bounce, in 2020 investor confidence in the UK is likely to remain subdued and Boris Johnson’s Brexit stance could be a major source of volatility in financial markets.” The deVere CEO concludes: “Despite the markets currently surging, investors must avoid complacency. “2020 promises to be a year in which political factors – including Boris Johnson’s Brexit plan and the U.S. presidential election, amongst others – could potentially spook markets. “Investors should assess and, where necessary, rebalance their portfolios to take advantage of the potential opportunities and to mitigate the risks.” The risk to investors is still present, and despite some of the clarity which has been given following the UK election results, many issues are still cloudy. As Brexit negotiations will continue to unfold as the newly elected Conservative Government tackles these issues, the market will be cautious as nothing is certain as of yet.

Hunting hedge their bets on December performance to meet annual results

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Hunting PLC (LON: HTG) have said that they expect annual profits to remain within their current market expectations, but are dependent on results in December.

Hunting manufacture premium, high end downhole metal tools and components required to extract hydrocarbons across the well construction, completion and intervention stages of the well’s lifecycle.

Shares in Hunting were bruised on Tuesday morning after the announcement, and trade at 383p (-6.19%). 17/12/19 11:47BST.

Hunting saw their shares in red a the end of October, as the firm speculated on lower profits following a US drilling slowdown.

The FTSE 250 listed energy company said that its third-quarter underlying profits had dropped below the $35 million and $42.4 million it had boasted in the first and second quarters respectively.

Again the firm today has seen its shares in red, as the firm hedged its bet on a solid December performance to allow it to meet guidance.

Hunting said, as anticipated, activity levels within the North American oil and gas industry continues to slow, with the pace of decline increasing in the US onshore market.

Further, the oil and gas contractor said “exhaustion” within its client base together with seasonal declines are hurting its fourth quarter results and “certain clients have closed facilities serving the US onshore sector due to the slowing market”.

Hunting added that operating profit and revenue in both October and November were below the average rate for the third quarter of the financial year due to the “slowing and highly competitive” US onshore market.

Hunting however did reassure shareholders saying that it continued to trade well and remained cash generative.

It expects to have around $110 million of cash at the end of the year, with $45 million of lease liabilities – resulting in a $65 million net cash position.

Hunting allude to the offshore and international oil market facing a slowdown, however there was a return to growth as Hunting Electronics business reported firm results.

Looking ahead to 2020, the company said: “At this time early announcements from Hunting’s publicly quoted clients indicate that capital spend in the year ahead will be lower than 2019, as the oil and gas industry endeavours to improve returns and increase cash generation for investors.”

In similar fashion to Hunting, fellow American operator Active Energy have seen their operations have stops and starts over the last week.

The firm said that it had begun it commercial production in Lumberton, North Carolina after the North Carolina Department of Environment & Natural Resources is continuing to review its application to operate.

At a time where oil prices continue to be volatile, and market trading is being hampered by both political and economic variables shareholders will hope that Hunting can pull out a strong set of results in December.

Trainline keeps its annual guidance as sales rise

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Trainline PLC (LON: TRN) have given shareholders a positive update saying that they are keeping their annual guidance.

Trainline saw their shares dip at the start of December, as Jeremy Corbyn and the Labour party announced travel policies to rival Trainline.

The Daily Mail reported that the Labour government would would create a ‘one-stop shop’ for rail passengers to buy tickets online without booking fees, the Mail reported without citing its sources.

This came as part of Labour’s business and travel policy where it was also mentioned that it had intentions to nationalize BT (LON: BT.A) in an attempt to win voters.

However, looking back now knowing the election result it seemed that neither of these policies won voters.

Today, Trainline reiterated their annual guidance as the firm continued to deliver strong growth in ticket sales and revenue.

Within the nine months to November 30, Trainline’s climbed 26% to £198 million, with UK revenue up 22% to £178 million and International rising 90% to £20 million.

Revenue from the UK consumer segment climbed 31% to £133 million, though Trainline for Business revenue in the UK was flat at £45 million.

Trainline did note there was a slowdown in the third quarter of its year as large corporations cut discretionary travel spending.

Trainline offers a rail and coach ticket purchase platform saw net ticket sales of £2.86 billion within the none months, seeing an 18% climb year on year.

In the UK, net ticket sales were up 14% to £2.47 billion, with International climbing 49% to £390 million.

UK consumer net ticket sales rose 24% to £1.54 billion, with business sales rising 2% to £930 million.

Trainline praised the development of online ticket sale growth driven by demand from mobile users, as customer shift from paper to e-tickets.

Chief Executive Clare Gilmartin said: “We continued to deliver strong growth in the third quarter of the financial year while we focus on our mission to make rail and coach travel easier for customers worldwide, encouraging a much greener way to travel.

“We are on track to deliver our plans for the full year and will continue to invest both in the UK and internationally to deliver the significant growth opportunities for Trainline in the year ahead.”

Trainline remained optimistic for its guidance encompassing its financial year, which ends in February.

Trainline are now performing well in a market which is appearing to be in a period of tough market trading, as evidenced by rival FirstGroup who saw their shares in red as the firm considered selling their North American operations yesterday.

Shares of Trainline trade at 507p (-0.59%). 17/12/19 11:38BST.

Bunzl optimistic to meet expected revenue growth in tough market

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Bunzl plc (LON: BNZL) have said to firms that they have remained optimistic to meet expected revenue growth in a tough market.

Despite the optimism, it seems that shares in Bunzl have remained in red on Tuesday.

Bunzl shares trade at 2,085p (-0.71%). 17/12/19 11:12BST.

Bunzl is one of the biggest British outsourcing companies, having specialist international distribution services all across the world. The firm is a main stay on the FTSE 100.

Bunzl yesterday had seen their shares in green, as the firm seemed to benefit over the Boris Bounce.

Bunzl saw their shares rise the third largest in the FTSE100, just behind Glencore (LON: GLEN) and British American Tobacco (LON: BATS) however all three of these firms saw their shares boosted by over four per cent.

It seems that the election bounce has now ended for Bunzl, as the firm said that it was on track to meet revenue growth figures however weak economic conditions were weighing down on trading.

Bunzl expects revenue for 2019 to rise by 2% with revenue at constant rates rising by 1%. Underlying revenue, London-based Bunzl noted, is set to be flat on 2018.

The firm saw a dip in its underlying revenue back in October, within its third quarter update and the firm alluded to economic conditions being a constraint on trading globally.

Shareholders will remain optimistic however, as the firm did announce the acquisition of Fire Rescue Safety Australia, which distributes specialist fire safety and personal protection equipment.

Chief Executive Frank van Zanten commented: “FRSA has a market-leading position in the provision of emergency response solutions in Australia and further expands and develops the scope of our operations there. We are delighted to welcome their employees to the group.”

“The group’s expectations for the year 2019 remain unchanged with overall trading consistent with the slowing underlying revenue growth indicated in previous announcements this year due to the impact of the continued mixed macroeconomic and market conditions across the countries and sectors in which the Group operates,” said Bunzl.

In the tough operating market, it does seem that Bunzl are doing well and having had a track record of fighting market slumps, shareholders can remain positive for future outlook.

Unilever shares crash following profit warning and Asian slump

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Unilever (LON: ULVR) have seen their shares in red, as it gave shareholders a gloomy outlook for their annual results.

Unilever have seen a turbulent time of trading in 2019. In October, the firm saw its growth slump in both India and China, which alerted shareholders.

Unilever revealed an underlying sales growth of 2.9%, with 1.4% from volume and 1.5% from price. Meanwhile, turnover grew by 5.8% driven by sales growth.

Just a month on, the firm made a new Chairman appointment in Nils Andersen.

Andersen was brought into the firm to tackle the slowdown in Indian and Chinese business, having had experience working with AP Moller Maerskv , Carlsberg A/S and as a non executive director at BP.

Unilever today have seen their shares crash, as the firm reported that underlying sales growth will fall short of guidance due to economic slowdown in South Asia and tough trading conditions in West Africa.

The FTSE 100 listed firm initially had expected underlying sales growth in the lower half of its 3% to 5% multi-year range. However, it now expects underlying sales “slightly below” this guidance.

The main reason that Unilever alluded to this change was the challenges in the quarter in some markets”, including continued trouble in west African markets and a slowdown in south Asia, one of Unilever’s biggest markets.

Chief Executive Alan Jope said: “Due to challenges in certain markets, we expect a slight miss to our full year underlying sales growth delivery.

“Looking ahead to 2020, growth will be second-half weighted. While we expect improvement in H1 2020 versus this quarter, we expect that first half growth will be below 3%. Our full year underlying sales growth is expected to be in the lower half of the multi-year range.

“Growth remains our top priority and we are confident we have the right strategy and investment in place to step up our performance.”

Shares in Unilever crashed 5.03% to 4,397p on the announcement. 17/12/19 11:03BST.

Lloyds & RBS put under stress after failing Bank of England Test

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Two of Britains biggest banks in Lloyds (LON:LLOY) and Royal Bank of Scotland Group plc (LON:RBS) have seen their shares dip after failing the UK’s most rigorous banking test.

Both the British banks had seen their shares in green since Friday, as the firms continued to ride a wave of optimism following PM Johnsons election win dubbed the ‘Boris Bounce’ by analysts.

However, today the picture is slightly more worrying for both of the British banks.

Both banks passed the Bank of Englands annual assessment in the balance sheet department.

However, plans to double a 100 basis point capital buffer designed to protect lenders in depressed economic conditions could put both bank’s 2020 share buyback plans in jeopardy, analysts said.

“Given we have not seen an acceleration in credit growth, we conclude this is being put in place to be, for lack of a better word, a “Brexit buffer” as the Bank of England has now determined that a 2% buffer is more appropriate in a “standardised risk environment,” Jefferies analyst Joseph Dickerson said.

The increase in the countercyclical buffer is seen likely to lead to a reduction in core tier 1 capital requirements by a similar amount, allowing major British lenders to absorb up to 23 billion pounds of losses in a downturn without restricting lending, as Reuters reported.

But near-term goals to deliver more than a billion pounds of shareholder rewards via a buyback bonanza must now be considered “best case”, according to analysts at KBW.

Lloyd’s have already been put into bad media spotlight earlier this year. The firm faced public scrutiny when they received criticism over the treatment of victims within the HBOS fraud scandal.

Certainly, this will do no favor to either firm especially at a time where the global banking industry and firms such as Lloyds and HSBC (LON: HSBA) have seen their profits take a bruising.

Certainly, being a big player in the banking industry does often lead to a lot of media coverage both good and bad, but not passing the Bank of England stress test may alert both senior management and shareholders.

Shares in Barclays dipped 4.29% to 249p. 17/12/19 10:49BST.

Shares in Lloyds fell further by 5.49% to 63p. 17/12/19 10:50BST.

UK unemployment rate at lowest level since 1975

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New data revealed on Tuesday that unemployment has reached its lowest rate since the three month period to January 1975. The Office for National Statistics said that the unemployment rate has reached a historic low of 3.8%. Meanwhile, the number of people in employment grew by 24,000 to 32.80 million in the three months to October 2019, compared with the previous quarter. Indeed, the employment rate reached a record high of 76.2%, the Office for National Statistics revealed. Over recent months, the growing economic uncertainty has been linked to the UK’s chaotic attempts at departing from the European Union, which has now been postponed yet again until the end of January. Last week’s general election saw the Conservatives win a majority of 80 seats. “The fall in the number of unemployed people was driven by women, whose unemployment reduced by 18,000 to 566,000. On a year-on-year basis, the number of unemployed women reduced by 64,000. The number of unemployed men increased by 4,000 to 715,000 on the quarter but reduced by 29,000 in the year to October,” the Office for National Statistics said in its report. Indeed, the Office for National Statistics said that the three months to October saw the lowest unemployment rate for women, coming in at 3.5%. The unemployment rate among men was largely unchanged at 4%, the Office for National Statistics said. The GBP/USD is below 1.3200 following the release of the mixed UK jobs data. GBPUSD opened around 1.3330/40, but moved quickly below 1.3300, with pain kicking in. It eventually buckled to low as 1.3236 before reverting to 1.3300. Still, selling pressure has remained as focus shifts back to the increasing prospects of a hard or a cliff-edge Brexit to which the odds have gone up considerably after this morning’s headlines,” Stephen Innes, APAC market strategist at AxiTrader, provided an analysis. With the election out of the way, UK politics can turn its attention back to Brexit, and the famous question occurs yet again – deal or no deal?

Fulham Shore shares dip despite stable update

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Fulham Shore PLC (LON: FUL) have seen their shares dip despite giving shareholders a sound update on Monday.

Fulham Shore are a group of distinct growth restaurant businesses operating in the UK, each driven by skilled and incentivised restaurant entrepreneurs. The firm boast names such as Franco Manca Pizza and The Real Greek.

Today, the firm has seen its first half revenues rise due to the launch of new restaurants and rising customer numbers.

For the half-year ended September 29, the restaurant operator posted revenue of £36 million, up 9.3% from £33.3 million in the comparative year ago period.

Pretax profit, however, slumped year-on-year to £743,000 form £1.5 million, mainly due to recognition of interest on lease liabilities under new IFRS16 accounting rules.

First half headline earnings before interest, taxes, depreciation and amortisation increased 68% year-on-year to £8.4 million.

The performance was boosted by the opening of six new six new Franco Manca pizzerias and one new The Real Greek restaurant. The launch of the Franco Manca loyalty scheme and mobile app was credited for the rise in customer numbers as over 55,000 registered users were recorded at last count.

Chair David Page said: “Looking ahead, the board remains confident that Fulham Shore is well positioned for continued growth and a great future. We look forward to continuing this positive momentum in the period ahead.”

Shares of Fulham Shore dipped 5.55% to 10p on Monday afternoon. 16/12/19 15:56BST.

Certainly, Fulham Shore can be pleased with the update that they have given shareholders today, even though share price movements may have not reflected this.

Rival, FTSE250 listed Restaurant Group (LON: RTN) saw their shares crash despite its lead brand Wagamama reporting a strong performance.

Wagamama reported strong second quarter gains, as revenues rose 11% year-on-year to £93.5 million, with like-for-like revenue growth coming in at 6.3%.

Another name in Loungers PLC (LON: LGRS) saw their shares spike just under two weeks ago, as the firm gave a bullish update to the market.

For the 24 weeks to October 6, Loungers revenue climbed 22% on the year before to £79.8 million, with the pretax loss narrowing to £2.5 million from £4.3 million. On a like-for-like basis, revenue growth was 5.4%, a figure Loungers said was “sector leading”.

Shareholders of Fulham Shore should remain confident on the update provided, however, as big guns such as J D Wetherspoon plc (LON: JDW) continue to report strong trading figures, which will make the market more competitive and saturated.

Significant discovery for Touchstone

More good drilling news from Trinidad-focused oil and gas producer Touchstone Exploration Inc (LON: TXP). The results of the Cascadura-1ST1 on the Ortoire exploration block in Trinidad suggest a significant crude oil discovery. The share price has jumped by more than two-fifths to 19.75p. It has more than one year since it was that high.
The announcement is full of technical language. The well indicates 1,037 feet gross of oil pay. In reality, the result was much better than expected and this could be a large discovery. It still needs to be fully tested, though.
The Cascadura-1ST1 well will be...

Nostrum Oil & Gas shares crash following CEO departure

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Nostrum Oil & Gas PLC (LON: NOG) have seen their shares crash on Monday following the immediate resignation of their CEO.

Nostrum Oil & Gas plc is an oil and gas exploration and production company operating in Kazakhstan.

Shares of Nostrum Oil & Gas crashed 8.31% to 15p on the announcement. 16/12/19 15:26BST.

Nostrum have seen a turbulent time of trading across 2019, with shares coming up and down.In July, the firm posted steady results for the first half of 2019 and notified investors of proposed acquisitions of sites in Kazakhstan.

The Company stated that production was in line with expectations and that the first half was financially positive. Despite this, revenues are expected to finish at US $174 million for H1 2019, down from $191 million for H1 2018, which caused shares to dip.

Later in the year, the firm saw their shares crash once again as nine month revenues shrunk, which caught shareholders attention.

Nine month volume sales decreased to 27,515 barrels of oil equivalent per day from 30,523 barrels the year before, showing a significant slow down in production.

Additionally, the firm also faced production cuts in liquid petroleum. In this market gas volumes also dropped a less dramatic 5.4% to 3,680 barrels of oil equivalent per day from 3,891 boepd. While dry gas sales volumes fell 1.1% to 14,255 boepd from 14,415 boepd.

Following the poor performance by the firm, CEO Kai-Uwe Kessel announced his resignation on Monday whilst a strategic review of the company is ongoing.

Independent Non-Executive Director Kaat Van Hecke will takeover as CEO from Monday.

Van Hecke has been a Nostrum board member since the end of 2016. She has been a managing director at (OMV VIE: OMV) and had held executive positions at ExxonMobil Corp (executive positions at ExxonMobil Corp and Royal Dutch Shell PLC.) and Royal Dutch Shell PLC (LON: RDSB).

“On behalf of the board and management of Nostrum, I would like to thank Kai for his contributions over the last 15 years. I am delighted that Kaat, during this period of strategic review, is stepping up to take the executive role at Nostrum,” Chair Atul Gupta said.

The firm began a strategic review of operations which a sale of the firm was questioned, which worried shareholders.

“The first nine months of 2019 have been very challenging. We have seen quicker than expected decline in our core producing reservoirs resulting in a reduction in our sales guidance for 2019 by 1,000 barrels per day,” said Kessel said at the time.

The firm firm reported sales volumes of 27,515 barrels of oil equivalent per day for the quarter, down 9.9% from 30,523 barrels a year before.

The fall in production was due to quicker-than-expected field declines, which led to a reduction in 2019 output guidance from Nostrum at the end of October.

This morning, rival PetroTal Corp (LON: PTAL) saw their shares rally as it boasted a new production record.

Certainly a huge change is needed and the senior board will have to make more changes to turnaround fortunes in a period of tough trading for Nostrum Oil & Gas.